"How can we convert SEP IRA to 401(k)?"

You are confusing plan with account.

The Plan is the type of retirement and the provisions under IRS regulation, such as SEP IRA or 401(k) or SIMPLE IRA are Plans. The plan provided to the taxpayer controls the type of account(s) and provisions for the money. The contributions were made under the plan in force at that time and meeting the IRS regulations, as well.

The business establishes the plan. For instance, a SIMPLE IRA plan can provide for contributions to individual brokers and not require that every participant uses the same brokerage. "Use Form 5304-SIMPLE if you permit plan participants to select the financial institution to receive their SIMPLE IRA plan contributions. Use Form 5305-SIMPLE if you require all contributions under the SIMPLE IRA plan to be initially deposited at a financial institution you designate."

The account is what your taxpayer owns. They have an SEP IRA account, which is different than having a 401(k) account. When/if they establish a 401(k) plan, they can make sure that plan includes a provision which allows SEP and 401(k) to be rolled/transferred into the 401(k) plan, if that is what they want to do. Otherwise, let them simply keep their SEP IRA as is.

None of this changes history.